financial statements summary for the three months ended ... · communications system, we submitted...

This translation is to be used solely as a reference and the consolidated financial statements in this release are unaudited.

Financial Statements Summary for the Three Months Ended June 30, 2012 [ Japan GAAP ] July 25, 2012

Company Name KDDI CORPORATION Stock Listing Tokyo Stock Exchange-First Section Code No. 9433 URL http://www.kddi.com Representative Takashi Tanaka, President

Scheduled date for filing of quarterly report July 31, 2012

Quarterly earnings supplementary explanatory documents: Yes

Quarterly earnings presentation: Yes (for institutional investors and analysts) (Amount Unit : Millions of yen, unless otherwise stated) (Amounts are rounded down to nearest million yen)

1. Consolidated Financial Results for the Three Months Ended June 30, 2012 (April 1, 2012 to June 30, 2012) (1) Consolidated Results of Operation （Percentage represents comparison change to the corresponding previous quarterly period）

Operating Revenues Operating Income Ordinary Income Net Income % % % %

Three months ended June 30, 2012 861,615 (0.4) 94,211 (32.8) 90,186 (31.9) 51,291 (28.7)Three months ended June 30, 2011 864,964 (0.1) 140,095 8.4 132,448 8.1 71,945 0.0

(Note) Consolidated Statements of Comprehensive Income Three months ended June 30, 2012: 53,444 million yen; (32.7%) Three months ended June 30, 2011: 79,374 million yen;13.4%

Net Income per Share Diluted Net Income per Share Yen Yen

Three months ended June 30, 2012 13,420.61 12,288.39 Three months ended June 30, 2011 16,945.04 -

(2) Consolidated Financial Position Total Assets Net Assets Equity Ratio % As of June 30, 2012 3,921,135 2,148,983 53.0 As of March 31, 2012 4,004,009 2,128,624 51.5 (Reference) Shareholder’s Equity As of June 30, 2012: 2,079,009 million yen As of March 31, 2012: 2,060,746 million yen

2. Dividends Dividends per Share

1stQuarter End 2nd Quarter End 3rd Quarter End Fiscal Year End Total Yen Yen Yen Yen Yen

Year ended March 31, 2012 - 7,500.00 - 8,500.00 16,000.00Year ending March 31, 2013 - Year ending March 31, 2013 (forecast) 8,500.00 - 85.00 -Note: Changes in the latest forecasts released: None

Dividend forecasts for the year ending March 31, 2013, take into account a 1:100 stock split on common stock with the effective date of October 1, 2012. If adjusted to reflect the number of shares prior to the stock split, the forecast total dividend amount will be equivalent to 17,000.00 yen (2nd quarter end: 8,500.00 yen; fiscal year end: 8,500.00 yen).

3. Consolidated Financial Results Forecast for Year Ending March 31, 2013 (April 1, 2012 to March 31, 2013) （Percentage represents comparison to previous fiscal year）

Operating Revenues Operating Income Ordinary Income Net Income Net Income per Share

% % % % YenEntire Fiscal Year 3,580,000 0.2 500,000 4.7 490,000 8.6 250,000 4.8 654.14Note: Changes in the latest forecasts released: None

In the indicated consolidated financial results forecast for the year ending March 31, 2013, net income per share takes into account the 1:100 stock split on common stock, with an effective date of October 1, 2012. If adjusted to reflect the number of shares prior to the stock split, net income per share will be equivalent to 65,414.00 yen.

Notes

(1) Changes in significant consolidated subsidiaries during the three months ended June 30, 2012 : None

(2) Application of accounting methods which are exceptional for quarterly consolidated financial statements : None

(3) Changes in accounting policies, accounting estimates and restatement of corrections 1) Changes in accounting policies resulting from the revision of the accounting standards and other

regulations : Yes

2) Other changes in accounting policies : None 3) Changes in accounting estimates : Yes 4) Restatement of corrections : None

Note: In accordance with article 10-5 of “Regulations concerning the terms, forms and preparation methods for quarterly consolidated financial statements.” Please refer to P.10 “Notes Regarding Summary Information (Notes) - Changes in accounting policies, accounting estimates and restatement of corrections” for details.

(4) Numbers of Outstanding Shares (Common Shares)

As of June 30, 2012 4,484,8181) Number of shares outstanding (inclusive of treasury stock) As of March 31, 2012 4,484,818As of June 30, 2012 663,0062) Number of treasury stock As of March 31, 2012 663,006

For the three months ended June 30, 2012 3,821,8123) Number of weighted average common shares outstanding (cumulative for all quarters) For the three months ended June 30, 2011 4,245,842

Indication of Quarterly Review Procedure Implementation Status This quarterly earnings report is exempt from quarterly review procedure based upon the Financial Instruments and Exchange Act. It is under the review procedure process at the time of disclosure of this report. Explanation for Appropriate Use of Forecasts and Other Notes The forward-looking statements such as operational forecasts contained in this statements summary are based on the information currently available to KDDI Corporation (hereafter: the “Company”) and certain assumptions which are regarded as legitimate. Actual results may differ significantly from these forecasts due to various factors. Please refer to P.9 “Qualitative Information on Consolidated Financial Results Forecast” under [the Attachment] for the assumptions used and other notes.

The Stock Split The Company resolved at a meeting of the Board of Directors held on April 25, 2012, that the common stock will be split 100 for 1, and the trading unit of the stock will be 100 shares with an effective date of October, 1, 2012. Please refer to relevant items in the forecasts for financial results and dividends in the fiscal year ending March 31, 2013.

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[the Attachment]

Index of the Attachment

1. Qualitative Information / Consolidated Financial Statements, etc. ................................................................. 2

(1) Qualitative Information on Consolidated Financial Results .................................................................... 2

(2) Qualitative Information on Consolidated Financial Position ................................................................... 8

(3) Qualitative Information on Consolidated Financial Results Forecast ...................................................... 9

2. Notes Regarding Summary Information (Notes) ............................................................................................. 10

Changes in Accounting Policies, Accounting Estimates and Restatement of Corrections .............................. 10

3. Consolidated Financial Statements ................................................................................................................. 11

(1) Consolidated Balance Sheets .................................................................................................................. 11

(2) Consolidated Statements of (Comprehensive) Income ............................................................................ 13 Consolidated Statements of Income (For the Three Months ended June 30, 2012) ................................. 13 Consolidated Statements of Comprehensive Income (For the Three Months ended June 30, 2012) ........ 15

(3) Consolidated Statements of Cash Flows ................................................................................................. 16

(4) Going Concern Assumption .................................................................................................................... 18

(5) Material Changes in Shareholders’ Equity .............................................................................................. 18

(6) Segment Information, etc. ....................................................................................................................... 18

(7) Significant Subsequent Event ................................................................................................................. 19

* The Company holds an earnings presentation for investors as below. Documents distributed at the presentation are scheduled to be posted on our website at the same time as the release of the financial statements summary. Videos and main Q&As are planned to be posted immediately after the presentation.

- Wednesday, July 25, 2012- Earnings presentation for institutional investors and analysts

* In addition to the above earnings presentation, the Company holds conferences on its business and results for individual investors. Please check our website for the schedule and details.

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1. Qualitative Information / Consolidated Financial Statements, etc. (1) Qualitative Information on Consolidated Financial Results

1) Results Overview For the three months ended June 30, 2012 (Amount unit: Millions of yen)

Three months endedJune 30, 2011


Increase (Decrease)

Increase (Decrease)%

Operating Revenues 864,964 861,615 (3,348) (0.4) Operating Expenses 724,868 767,403 42,535 5.9Operating Income 140,095 94,211 (45,884) (32.8)Non-operating Income (Expense) (7,647) (4,024) 3,623 -Ordinary Income 132,448 90,186 (42,261) (31.9)Extraordinary Income (3,975) - 3,975 -Income before Income Taxes and Minority Interests

128,472 90,186 (38,285) (29.8)

Total Income Taxes 54,738 37,283 (17,454) (31.9)Income before Minority Interests 73,733 52,902 (20,830) (28.3)Minority Interests in Income 1,787 1,611 (175) (9.8)Net Income 71,945 51,291 (20,654) (28.7)

Operating revenues for the three months ended June 30, 2012 amounted to ¥861,615 million, 0.4% slight decrease year on year, mainly due to the decrease in au communications revenues caused by Maitsuki Discount (monthly discount) by increased sales of smartphones, and the decrease in revenues of mobile terminal sales caused by the decline in handset replacement, despite the increase in FTTH revenues by the increase of FTTH subscriptions and revenues of overseas subsidiaries.

Operating expenses amounted to ¥767,403 million, 5.9% increase year on year, mainly due to the increase in sales commissions and communication facility fee by increase in revenues of FTTH and other services.

As a result, operating income was down 32.8% year on year to ¥94,211 million, ordinary income was down 31.9% year on year to ¥90,186 million, and net income was down 28.7% year on year to ¥51,291 million.

Overview of Economic Conditions The global economy continues to be affected by major risk factors, owing to the protracted European financial crisis. Major central banks are introducing additional measures to prop up the economy through further monetary easing, but the results of these policies are temporary and are not alleviating concerns of a global economic slowdown. The U.S. economy, although relatively stable at present, will face sharp fiscal austerity unless new policy agreements are forthcoming toward year-end. Amid the potential for such constraint, which would invite a business slowdown, the economic outlook remains opaque. The Japanese economy is showing signs of gradual recovery, supported by the growing momentum of recovery-fueled demand and other policies. However, we will need to continue monitoring such factors as electricity shortages and other risks of an economic downturn, coupled with world economic trends. Industry Trends In the mobile communications market, competition for customers is intensifying through means such as offering more affordable pricing plans; providing a diverse range of devices including smartphones and tablet-type terminals; and expanding a complete lineup of downloadable content such as music, videos, and ebooks. Furthermore, changes on the system front will affect the competitive environment going forward, as new frequencies are being allocated to telecommunication companies in response to growing mobile data traffic, in line with the increasing use of smartphones. In the fixed-line communications market, in addition to the development of services that combine mobile and fixed-line aspects, market is moving toward a new stage of competition characterized by the fusion of telecommunications and broadcasting. KDDI’s Position The Company steadily implemented its medium to long term strategies-the 3M Strategy and the Global Strategy-targeting the realization of the three commitments: “More Connected” “More Diverse Values” “More Global.” 3M stands for Multi-network, Multi-device, and Multi-use. Our growth strategy calls for the establishment of an environment that seamlessly provides a variety of content and services to customers

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through an optimal network that can be used anytime and anywhere, with a variety of devices, including smartphones and tablets. To take advantage of our competitive edge in owning both mobile and fixed-line networks, we are promoting the 3M Strategy to differentiate ourselves from other companies. In accordance with the full-fledged launch of our 3M Strategy, in accordance with our internal organizational structure, from April 1, 2012 we revised our reportable business segments from the Mobile Business and the Fixed-line Business to Personal Services, Value Services, Business Services and, Global Services. We are implementing the 3M Strategy aggressively, as we work to increase the number of au subscriptions and households utilizing “au Smart Value” in the core Personal Services Segment and, in the Value Services Segment, increasing “au Smart Pass” members and expanding value-added revenues. Meanwhile, with regard to our plans to set up designated base stations to promote the 3.9-generation mobile communications system, we submitted an application to use the 700MHz band frequency, and we received a license on June 28, 2012.

- Subscriptions of Major Services (Unit : Thousand line)

As of June 30, 2011 As of June 30, 2012 Increase (Decrease)

Increase (Decrease) %

au (Note 1) 33,352 35,675 2,323 7.0(Ref.) UQ WiMAX 1,030 2,906 1,876 182.1FTTH 1,987 2,439 452 22.7Metal-plus 2,465 2,093 (372) (15.1)Cable-plus phone 1,486 2,295 809 54.4CATV (Note 2) 1,106 1,159 53 4.8Fixed access lines (Note 3) 6,555 7,410 855 13.0

Notes: 1. Inclusive of module-type contracts 2. Number of households with at least one contract via broadcasting, internet, or telephone 3. Total access lines of FTTH, direct-revenue telephony (Metal-plus, Cable-plus phone), and CATV subs. excluding crossover. [Reference]

・ For “Cable-plus phone,” alliances with cable television companies grew steadily, reaching 92 CATV companies, 172 channels as of June 30, 2012.

・ Consolidated subsidiary JCN Group, which oversees 19 channels primarily in the Tokyo metropolitan area. 2) Results by Business Segment From the three months ended June 30, 2012, KDDI Group (hereafter: the “Companies”) have reclassified its reportable segments into four-“Personal Services,” “Value Services,” “Business Services,” and “Global Services.” The business included in each segment is as follows.

New Business Segment

Major Services

Personal Services For households and individuals Providing communications services, mobile handset salesValue Services For households and individuals Providing content and settlement services Business Services For companies Providing communications services, mobile handset

sales, data center services, ICT solution/cloud services Global Services For companies and individuals

overseas Providing communications services, data center services, ICT solution/cloud services

Segment information for the three months ended June 30, 2011 has been revised based on above change.

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- Personal Services For the three months ended June 30, 2012 (Amount unit: Millions of yen)



Increase (Decrease)


Operating Revenues 685,712 665,779 (19,932) (2.9)Operating Expenses 581,001 600,713 19,712 3.4Operating Income 104,711 65,065 (39,645) (37.9)

Operating revenues for the three months ended June 30, 2012 amounted to ¥665,779 million, 2.9% decrease year on year, mainly due to the decrease in au communications revenues caused by Maitsuki Discount by expanding smartphones subscriptions, and the decrease in revenues of mobile terminal sales caused by the decline in handset replacement, despite the increase in FTTH revenues by the increase of FTTH subscriptions.

Operating expenses amounted to ¥600,713 million, 3.4% increase year on year, mainly due to the increase in sales commissions and communication facility fee by increase in revenues of FTTH and other services.

As a result, operating income amounted ¥65,065 million, down 37.9% year on year.

Overall ・ From April 10, 2012, we took the industry lead in introducing “EV-DO Advanced” technology for

alleviating congestion at mobile base stations, owing to the expansion of mobile data traffic, against a backdrop of the increasing use of au smartphones. By June 30, 2012, we had rolled out this technology nationwide. “EV-DO Advanced” technology monitors the degree of congestion at base stations in real time and switches au mobile phone traffic using congested base stations to those nearby that are less busy, raising customers’ effective communication speed. Introducing this functionality has enabled to stations to handle approximately 1.5 times the previous volume of data traffic and in congested locations customers’ effective communications speed has on average more than doubled*. * Based on the results of the Company’s simulation of the degree of congestion at mobile base stations and customer

usage conditions.

・ On June 4, 2012, the Companies began providing the “Disaster Voice Messaging Service,” which enables customers to use au smartphones to send pre-recorded voice information via packet communication networks to confirm their safety status in the event that an emergency renders telephone communications difficult. Provided as the “au Disaster Measure Apps,” in addition to 3G networks, this service can send and receive messages using WiMAX compatible smartphones over WiMAX networks. The app also contains performance-enhancing functionality to make e-mails easier to receive if communication circuits become congested owing to a disaster. Consequently, e-mail delays are reduced by up to 90% if a disaster or other calamity strikes over a wide area. By augmenting the “au Disaster Measure Apps,” the Companies plans to provide even better security and safety going forward.

・ In tandem with the July 22, 2012 allocation of au mobile phones to the 800MHz band frequency, service has been discontinued for au mobile phones with au IC cards that are incompatible with this new frequency, including “CDMA 1X” and “CDMA 1X WIN.”

3M Strategy

・ Service for “au Smart Value” commenced on March 1, 2012, and by May 2012 the number of au mobile phones using this service surpassed 1 million, rising to 1.33 million by the end of June. With the “au Smart Value” service, customers with au smartphones subscribing to FTTH , such as “au HIKARI” and other fixed-line communications services provided by designated CATV operators can receive a discount on their monthly au smartphone usage charges of ¥1,480 for up to two years (after two years, the discount will be ¥980, including tax). A wide-ranging base of customers has begun using this service shortly after its launch, allowing them to enjoy secure smartphone lifestyles. Going forward, we plan to increase the number of allied companies, enabling even more customers to make use of this service.

Mobile Terminals

・ To augment its lineup of au smartphones, in May 2012, the Companies commenced sales of the “HTC J ISW13HT” (manufacturer: HTC Corporation), the first au-brand smartphone with AndroidTM 4.0. HTC, which receives broad support in countries throughout the world and was the first company in the world to produce AndroidTM smartphones, and the Company worked together to develop an original model especially

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for the Japanese market. Retaining HTC’s hallmark ease of operation, this new model is customized with such functions as one-seg, Osaifu-Keitai®, infrared light communications, Wi-Fi tethering, and WiMAX communication.

・ In addition, rollout of a new lineup of five new au smartphones commenced in May, 2012. All these models include AndroidTM 4.0, and three of the five models employ Wi-Fi tethering. These “+WiMAX” compatible smartphones enable customers to enjoy high-speed Internet connections.

＜Products released for the three months ended June 30, 2012＞

Smartphones IS “HTC J ISW13HT,” “URBANO PROGRESSO,” “AQUOS PHONE SERIE ISW16SH”

Feature phones au “K011,” “Simple Phone K012”

Other communications device “REGZA Tablet AT500/26F”

Brand collaboration Fashion brand collaboration cover, designer collaboration cover Accessories

Others “BLACK PREMIUM” series, earphone jack accessories

Services

・ On April 18, 2012, we began to roll out “International SMS,” a short messaging service (SMS (C mail)) that allows the sending and receipt of short messages with mobile phones from overseas telecommunications companies. As a result, au smartphones and au mobile phones became able to send and receive SMS (C mail) with mobile phones from 215 overseas telecommunication companies in 117 countries and regions.

・ From May 2012, the Companies made pictograph designs consistent with those of NTT DOCOMO, INC., and eAccess Ltd., thereby simplifying e-mail communications among different providers. This consistency makes e-mail communications more convenient and enjoyable.

・ On June 4, 2012, we began offering the “Radio wave Support 24” service as a renewed version of the “Let’s Create! au Area” service that allows customers to make “home reception quality improvement requests” and “inquiries related to area information” for au mobile phones to the au website, thereby augmenting response to home reception quality improvement requests. The response time to customers requesting home visits to check signal quality has been shortened from within 48 hours of application to within 24, in principle. Through this faster response, the Company aims to enhance area quality further.

Wi-Fi

・ Even after the number of au Wi-Fi SPOTs surpassed 100,000 on March 29, 2012, the Company continued its service rollout in Tokyo’s Nishi Shinjuku area, as well as at Starbucks and the Skylark Group, aggressively developing service in areas where traffic is concentrated. Furthermore, in addition to Japan the au Wi-Fi SPOT service can be used in more than 100 overseas countries and regions, including in the Americas, Europe and Asia, which is convenient for customers traveling overseas on business or for pleasure. A specialized app, the “au Wi-Fi Connection Tool,” can be used to simplify setup.

・ Battery life, which has been a point of dissatisfaction when using Wi-Fi, has been improved on au smartphones sold from May 2012, approximately doubling the previous level. For au smartphones sold before that time, the Companies expect to make software update available in July.

Main Services in the Second Quarter and Beyond

・ On July 1, 2012, the Companies expanded the number of providers that make the “Kaigai Double-Teigaku” packet flat-rate service available to au mobile phone customers when using overseas roaming access. This expansion increased the number of countries and regions where “Kaigai Double-Teigaku” is available to 100.

・ From July, the number of “au Smart Value” allied companies will increase substantially, gaining one new FTTH company and 33 CATV companies constituting 35 channels. As a result, as of September 2012, allied companies offering “au Smart Value” will number five FTTH companies and 74 CATV companies constituting 153 channels.

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- Value Services For the three months ended June 30, 2012 (Amount unit: Millions of yen)



Increase (Decrease)


Operating Revenues 28,396 34,721 6,324 22.3Operating Expenses 17,579 24,634 7,054 40.1Operating Income 10,816 10,086 (730) (6.7)

Operating revenues for the three months ended June 30, 2012 amounted to ¥34,721 million, 22.3% increase year on year, due to the increase in revenues brought by content and settlement services by WebMoney Corporation, which became a consolidated subsidiary in the year ended March 31, 2012. Operating income amounted to ¥10,086 million, 6.7% decrease year on year, mainly due to the increase in operating expenses caused by the launch of “au Smart Pass.”

3M Strategy

・ Members of the “au Smart Pass” service, which launched on March 1, 2012, surpassed 1 million in May 2012, reaching 1.47 million as of the end of June. “au Smart Pass” offers unlimited use of more than 500 popular apps as well as valuable coupon and point services, 10GB of storage for photos and videos, and extensive security and support, all for ¥390 per month (including tax). The service is being well received by a wide range of customers.

・ The “Video Pass” service launched on May 15, 2012. This video service allows customers to choose from an extensive lineup, enjoying favorite movies anytime, anywhere. “Video Pass” users who subscribe to the unlimited viewing plan, which is available for a monthly fee of ¥590 (including tax), can view an unlimited amount of other titles from a wide range of genres, including Japanese and foreign movies, drama, anime, music, Korean popular entertainment, variety shows and original releases and watch one new movie release per month. Also available is a service plan that allows users to view new movies and other popular titles individually. PC compatibility was added on June 1, 2012.

・ On May 25, 2012, the Companies began providing “au Smart Pass” recommended information and friend communication status via its website to au AndroidTM smartphone users, delivering recent news and other information via the “au Widget.”

・ June 27, 2012 marked the launch of “Uta Pass,” a music service for au smartphones that lets subscribers listen to an unlimited amount of music content on channels spanning a variety of genres, while facilitating a shared music experience between users. The service is offered for a monthly fee of ¥315 (including tax).

・ On June 29, 2012, 3rdKind Inc. and the Company entered a business alliance for collaboration in the overseas game publishing business, providing overseas games to the Japanese app market via “au Smart Pass” and other services.

Services

・ The “Jibe” application that launched in November 2011 for users of “Friends Note,” a social communication portal for AndroidTM, topped 1 million users in May 2012.

Other

・ The Company, Kadokawa Group Holdings, Inc. (hereafter referred to as Kadokawa GHD) and Kadokawa Content Gate, Ltd. (hereafter referred to as Kadokawa CG), a Kadokawa Group company that operates the “BOOK☆WALKER” ebook platform, have agreed to a joint initiative to promote development of the ebook market. Based on this accord, some 5,000 titles owned by Kadokawa GHD companies will be made available via the “LISMO Book Store,” and “au Simple Payment” will be introduced for the “BOOK☆WALKER” ebook distribution service operated by Kadokawa CG. ・ From May 8 to July 16, 2012, the eighth “Walk Project,” the “au Smart Sports Kesennuma Camellia Walk,”

began with the aim of reinvigorating camellias at Kesennuma Oshima, which suffered severe damage in the Great East Japan Earthquake. Through this project, the Company donates ¥1 for each kilometer walked by a customer using “au Smart Sports Run & Walk.”


・ On July 3, NHN Japan Corporation (hereafter referred to as “NHN Japan”) and the Company entered into an alliance agreement aimed at spurring the growth of both companies’ businesses and enhancing user convenience. Going forward, we will strengthen coordination between the “LINE” business that NHN Japan

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operates as a smartphone app for free-of-charge voice and e-mail communications and the “au Smart Pass” service that the Company operates for smartphones.

- Business Services For the three months ended June 30, 2012 (Amount unit: Millions of yen)



Increase (Decrease)


Operating Revenues 153,335 156,297 2,962 1.9Operating Expenses 132,424 141,115 8,690 6.6Operating Income 20,910 15,182 (5,727) (27.4)

Operating revenues for the three months ended June 30, 2012 amounted to ¥156,297 million, 1.9% increase year on year. Contributing factors include the increase in revenues brought by the increase in the number of mobile terminal sales for corporate clients. Operating income amounted to ¥15,182 million, 27.4% decrease year on year, mainly due to the increase in handsets procurement cost and sales commission caused by the increase in handset unit sales.

3M Strategy

・ On April 1, 2012, we began offering “Basic Pack” and “Smart Value for Business.” “Basic Pack” is a cloud application that includes mail and files storage services, offered for ¥390 per month, optimized to meet high demands from corporate customers. Customers who sign up for “Smart Value for Business,” which includes access to KDDI-designated fixed-line communications services such as “au HIKARI Business” and “Basic Pack” receive a discount on monthly usage charges of ¥1,480 for up to two years (a discount of ¥980 after two years, including tax). On May 14, 2012, we added “KDDI Wide Area Virtual Switch” and other intranet services as designated fixed-line communications services to enable use by even more customers. Using an au smartphone and the “Basic Pack” provides customers with access to necessary business information when on the road at any time, greatly improving business efficiency.

・ In June 2012, we began providing “KDDI Flex Remote Access” and “KDDI ChatWork.” “KDDI Flex Remote Access,” which is a “Basic Pack” target services, enables connection via the Internet to PCs and smart devices with a single ID. This remote access service also provides customers with secure intranet access via au mobile phones and WiMAX. “KDDI ChatWork,” which will become “Basic Pack” target services, is offered through a business alliance with ChatWork Co., Ltd. “KDDI ChartWork” is a multidevice social communication service that can be used on smartphones and other devices, facilitating group chat, task management, file management and other tasks. This service resolves the issue of how to make meetings more efficient when they involve multiple locations and organizations. At the same time, the social networking function creates communication opportunities both within and outside a company, providing a new environment for business communications.

Services

・ On April 1, 2012, we be began offering the “au HIKARI Business” FTTH service targeting small and medium-sized companies, providing high-speed Internet and high-quality IP telephone services.

・ On April 10, 2012, we began providing “au Office Number.” This service allows customers to place calls via au mobile phones via fixed-line numbers, such as those with a 03 or 06 prefix. The service also facilitates the rapid setup of fixed-line telephone numbers even in environments where distributing fixed-line telephones is difficult. As a result, the service enables a variety of office environments and working styles. We have commenced the rollout of this service with prefixes from Japan’s major cities, including Tokyo (03 numbers) and Osaka (06 numbers), and we will expand the service area.


・ On July 2, 2012, we began providing a new cloud-based infrastructure service, the “KDDI Cloud Platform Service.” This service facilitates Internet and intranet connection, enable customers to make use of public and private clouds. The service usage format is available via dedicated servers and can be customized. In addition, the service provides inexpensive virtual server access, meeting a broad range of customer needs. The service is provided under an SLA that sets 99.99% availability as standard. A variety of expandability functions are also available, such as the DR option that enables the service to be deployed as a BCP measure, allowing system restoration from remote locations in the event of disaster.

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- Global Services For the three months ended June 30, 2012 (Amount unit: Millions of yen)



Increase (Decrease)


Operating Revenues 39,096 46,282 7,186 18.4Operating Expenses 37,963 44,898 6,934 18.3Operating Income 1,132 1,384 251 22.2

Operating revenues for the three months ended June 30, 2012 increased 18.4% year on year to ¥46,282 million, mainly due to the increase in revenues brought by CDNetworks Co., Ltd., which became a consolidated subsidiary in the year ended March 31, 2012, and overseas subsidiaries. Operating income increased 22.2% year on year to ¥1,384 million.


・ The Companies are strengthening its data center business in the Greater China market, which includes mainland China and Hong Kong. It is a new high-quality TELEHOUSE data center that complies with TELEHOUSE global standards. The second Beijing facility will boast a floor area of 25,000 square meters. The floor area of the TELEHOUSE HONG KONG CCC facility, which opened in 2011, will be increased to 20,000 square meters. Both facilities are scheduled to begin operations in December 2012.

3) Status of Major Affiliates UQ Communications Inc. (hereafter “UQ”), an equity-method affiliate of the Company, had 2.906 million subscribers and population coverage* topped 90% as of June 30, 2012. Since commencing high-speed, high-quality service, the WiMAX service has had the highest number of net additions among all mobile phone carriers and providers of broadband wireless access in June 2012, with the number of subscribers topping 3 million on July 14. The service area is being steadily expanded so that subscribers can use WiMAX services at subway stations and within train cars. This expansion includes subways and the country’s major railway routes in the Tokyo metropolitan, Chubu and Kansai metropolitan areas. During the current term, area expansion to include the Tokyo Monorail, Yokohama Municipal Subway Green Line, Fukuoka City Subway and Keihin Kyuko Railway was completed. In addition, so that the service can be used at TOKYO SKYTREE, which opened on May 22, the tower’s Tembo Galleria and Tembo Deck have been included in the service area. Note: Figures are calculated on the basis of whether communications are available at city, town and village government

offices. On May 1, au Insurance Company, Limited, an equity method affiliate, began underwriting “automobile insurance,” which is provided free of charge to “au Smart Pass” users.

Notes: 1 “Wi-Fi” is a registered trademark of Wi-Fi Alliance®. 2 “Android” “Google” are trademarks or registered trademarks of Google Inc.

3 WiMAX is a trademark or a registered trademark of WiMAX Forum. 4 “Osaifu-Keitai” is a registered trademark of NTT DOCOMO, INC. 5 “AQUOS” is a registered trademark of Sharp Corporation. 6 “REGZA” is a registered trademark of Toshiba Corporation. 7 “Smart Value” is a registered trademark of Energy Management Corporation.

(2) Qualitative Information on Consolidated Financial Position Consolidated total assets stood at ¥3,921,135 million, a decrease of ¥82,873 million from March 31, 2012. This decrease was primarily attributable to factors such as increases in securities (negotiable deposit, etc.) and accounts receivable-other. Total liabilities amounted to ¥1,772,151 million, a decrease of ¥103,232 million from March 31, 2012. Major factor contributing to this decrease was decrease in income taxes payable. An increase in retained earnings resulted net asset to amount to ¥2,148,983 million, an increase of ¥20,358 million from March 31, 2012. As a result, the shareholders’ equity ratio increased from 51.5% as of March 31, 2012, to 53.0%.

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The following describes the cash flow situation for the three months ended June 30, 2012. (Amount unit: Millions of yen)

Three months ended June 30, 2011

Three months ended June 30, 2012

Increase (Decrease)

Net cash provided by (used in) operating activities 145,097 (8,590) (153,687)Net cash provided by (used in) investing activities (77,938) (101,089) (23,151)Free cash flows 67,158 (109,680) (176,838)Net cash provided by (used in) financing activities (36,298) 27,302 63,600Effect of exchange rate change on cash and cash equivalents 603 1,324 720

Net increase (decrease) in cash and cash equivalents 31,463 (81,054) (112,517)Cash and cash equivalents at beginning of period 159,869 174,191 14,322Cash and cash equivalents at end of period 191,333 93,137 (98,195)

Note: Free cash flows are calculated as the sum of “Net cash provided by (used in) operating activities” and “Net cash provided by (used in) investing activities.”

Operating activities used net cash of ¥8,590 million. This includes ¥90,186 million of income before income taxes and minority interests, ¥147,769 million of income taxes paid, and ¥35,264 million of decrease in accounts payable-other. Investing activities used net cash of ¥101,089 million. This includes ¥77,341 million of purchase of property, plant and equipment and ¥14,986 million in payments for purchase of intangible assets. Financial activities provided net cash of ¥27,302 million. This includes ¥38,184 million in increase in short-term loans payable, ¥24,000 million in proceeds from long-term loans payable, and ¥31,999 million in repayment of payments for cash dividends paid. As a result, cash and cash equivalents as of June 30, 2012, decreased ¥81,054 million from March 31, 2012, to ¥93,137 million.

(3) Qualitative Information on Consolidated Financial Results Forecast

1. Outlook for the Fiscal Year Ending March 31, 2013

Overview We will promote our mission as a telecommunication company that supports a lifeline through construction of telecommunication infrastructure network that can be recovered in case of major natural disasters, and creation of effective BCP upon the experiences of the Great East Japan Earthquake. The Companies have formalized “three business visions” to respond quickly to changes in the operating environment, while at the same time growing sustainably and taking the lead in meeting emerging needs. ・ “More connected” -- We will aim to achieve multi-network connectivity by organically linking networks

owned by the Companies, including mobile phone, FTTH, CATV and WiMAX networks. We will also provide a high-speed communication environment and attractive content optimized for multi-device access. At the same time, the Company will enable multi-use services tailored to individual customer preferences, thereby making ourselves “more connected” to customer.

・ “More diverse values” -- The ongoing proliferation of Internet technologies, led by IP connectivity, are spawning ICT needs in a broadening host of fields, including medicine, health, education, government and the environment. By taking a more active part in various corporate initiatives and lifestyle aspects, the Companies offer further value to customers.

・ “More global” -- Although domestic demand is lackluster, due to Japan’s falling birthrate and the aging of society, globalization is accelerating. Making the world our stage, we will develop new communication- related businesses and cultivate new markets that match the needs of individual countries’ cultures and socioeconomic conditions, thereby aggressively promoting the creation of ICT environments in countries throughout the world.

To realize these visions, we will advance the full-scale implementation of the 3M strategy (Multi-network, Multi-device, Multi-use), which will enable customers to select a device the meets their own preferences and to enjoy a variety of content through an optimal network that can be used anytime and anywhere.

Personal Services With the Smart Passport Concept as its core strategy, through “au Smart Value” the segment will work to expand sales of the Companies’ FTTH services―“au HIKARI,” “Commuf@-hikari,” and “au HIKARI Chura.” In addition, the segment will strengthen its relationships with CATV companies and electric-power related communications companies. The segment will also work to expand the au customer base, achieve gains in revenues and profits, and maximize the number of FMC IDs* x FMC ARPU. Moving forward, the segment will work to develop an extensive handset lineup, including smartphones with communications functions that have been enhanced, such as through the addition of functions that are standard in

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Japan; high-speed smartphones utilizing au + WiMAX: Wi-Fi routers and other data communications devices; and tablets. In addition, the segment will work to provide innovative new services and work to expand service areas and further increase communications quality. The segment will also strive to provide a comfortable communications environment, at higher speeds than were previously possible, through the introduction of LTE. * Number of IDs for subscribers to both fixed-line and mobile. Value Services The Value Services segment will continue to provide cloud-based content services, centered on entertainment services. These will be linked with “au Smart Pass,” for multiple devices and multiple operating systems. At the same time, by establishing a service platform, moving toward more open services, and nurturing startup companies, the segment will work to increase the appeal of these services and achieve linked acquisitions of service subscriptions. In this way, the segment will strive to maximize Value ARPU. Business Services The Business Services segment will develop the “KDDI MULTI CLOUD” brand for corporate customers, provide cloud solutions that seamlessly integrate across the range from smartphones and tablets to networks, data centers, and applications, and propose work style reforms to customers. In addition, through the provision of “Smart Value for Business,” 3M services for small and medium-sized companies, the segment will strive to increase the number of the Companies’ customers. Global Services In addition to expanding “TELEHOUSE” data centers, the Global Services segment will strengthen its system for the one-stop provision to customers of optimal, high-value-added ICT solutions through the utilization of the services of consolidated subsidiaries CDNetworks and DMX. In addition, the segment will work to expand its customer base, including non-Japanese companies. In addition, the segment will also work aggressively to expand consumer businesses, such as Internet broadband operations in emerging countries and MVNO operations in the U.S. Full-Year Results The estimated consolidated financial results for the year ending March 2013 for full-year basis disclosed in the Financial Statements Summary for the year ended March 2012 (disclosed on April 25, 2012) were as follows; Operating Revenues: ¥3,580,000 million, Operating Income: ¥500,000 million, Ordinary Income: ¥490,000 million, Net Income: ¥250,000 million. There is no change to these figures. The Company has not prepared consolidated business forecasts for the six months ending September 30, 2012 because the rapidly changing operating environment, characterized by competition among telecommunication carriers, means it is difficult to make forecasts for this period. Notes: 1 WiMAX is a trademark or a registered trademark of WiMAX Forum. 2 “Smart Value” is a registered trademark of Energy Management Corporation. 3 “Wi-Fi” is a registered trademark of Wi-Fi Alliance ®.

2. Business Risks As the Companies pursue its business, there are various risks involved. The Companies take every effort to reduce these risks by preventing and hedging them. However, there are various uncertainties which could have negative impacts on the Companies’ brand image, liability, financial position and/or earnings performance such as; - subscription growth trends out of line with the Companies expectations due to competition, rival

technologies and rapid market shifts - breach of obligations regarding communications security and protection of customer privacy - natural disasters, accidents and power restrictions caused by earthquake, tsunami, typhoon, etc. - revision or repeal of laws and ordinances governing telecommunications, together with related government

policies - general legal and regulatory, litigation and patents, personnel retention and training, retirement benefits,

asset-impairment accounting, telecommunications sector consolidation and business restructuring in the Companies

2. Notes Regarding Summary Information (Notes) Changes in Accounting Policies, Accounting Estimates and Restatement of Corrections

(Changes in Accounting Policies for Items that Are Difficult to Categorize as Changes in Accounting Estimates) (Change in Depreciation) In accordance with revisions to the Corporation Tax Act, the Company and its domestic consolidated subsidiaries have revised their method of accounting for depreciation for property, plant and equipment acquired on or after April 1, 2012, in accordance with the post-revision Corporation Tax Act, from the three months ended June 30, 2012. The impact of these changes on income during the three months ended June 30, 2012, was slight.

3. Consolidated Financial Statements(1) Consolidated Balance Sheets

AssetsNoncurrent assets

Noncurrent assets-telecommunications businessProperty, plant and equipment

Machinery, net 581,117 579,709Antenna facilities, net 348,310 344,574Local line facilities, net 130,772 131,548Long-distance line facilities, net 5,480 5,200Engineering facilities, net 25,730 25,417Submarine line facilities, net 6,519 6,095Buildings, net 205,384 201,817Structures, net 30,987 30,326Land 249,239 249,250Construction in progress 132,822 143,371Other tangible assets, net 31,589 30,287Total property, plant and equipment 1,747,955 1,747,600

Intangible assetsRight of using facilities 10,577 10,635Software 175,084 168,207Goodwill 22,331 21,225Other intangible assets 10,369 10,318Total intangible assets 218,361 210,387

Total noncurrent assets-telecommunications business 1,966,317 1,957,988Incidental business facilities

Property, plant and equipment 135,770 144,326Intangible assets 91,664 90,721Total noncurrent assets-incidental business 227,435 235,048

Investments and other assetsInvestment securities 86,614 75,945Stocks of subsidiaries and affiliates 351,815 351,486Investments in capital of subsidiaries and affiliates 185 190Long-term prepaid expenses 91,272 92,981Deferred tax assets 104,829 106,767Other investment and other assets 47,777 49,287Allowance for doubtful accounts (9,120) (9,399)Total investments and other assets 673,373 667,259

Total noncurrent assets 2,867,126 2,860,296Current assets

Cash and deposits 100,037 99,965Notes and accounts receivable-trade 760,890 770,684Accounts receivable-other 66,286 50,380Short-term investment securities 80,188 204Supplies 65,232 58,303Prepaid expenses 15,301 41,270Deferred tax assets 57,781 46,947

(Amount unit: Millions of yen)

As of June 30, 2012As of March 31, 2012

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Other current assets 6,125 8,478Allowance for doubtful accounts (14,960) (15,394)Total current assets 1,136,882 1,060,839

Total assets 4,004,009 3,921,135Liabilities

Noncurrent liabilitiesBonds payable 349,991 299,996

200,916 200,854

Long-term loans payable 301,286 295,102Provision for retirement benefits 18,743 17,662Provision for point service program 91,453 92,336Other noncurrent liabilities 72,342 72,866Total noncurrent liabilities 1,034,733 978,819

Current liabilitiesCurrent portion of noncurrent liabilities 184,112 263,964Notes and accounts payable-trade 90,661 76,785Short-term loans payable 1,486 39,763Accounts payable-other 273,119 243,149Accrued expenses 20,370 21,487Income taxes payable 149,773 25,526Advances received 63,937 66,528Provision for bonuses 20,077 8,937Provision for loss on the Great East Japan Earthquake 1,992 1,848Other current liabilities 35,119 45,339Total current liabilities 840,650 793,332

Total liabilities 1,875,384 1,772,151Net assets

Shareholders' equityCapital stock 141,851 141,851Capital surplus 367,104 367,104Retained earnings 1,879,087 1,897,893Treasury stock (346,163) (346,163)Total shareholders' equity 2,041,879 2,060,685

Accumulated other comprehensive incomeValuation difference on available-for-sale securities 36,442 31,160Deferred gains or losses on hedges (676) (1,302)Foreign currency translation adjustment (16,899) (11,533)Total accumulated other comprehensive income 18,866 18,323

Subscription rights to shares 1,128 1,128Minority interests 66,749 68,846Total net assets 2,128,624 2,148,983

Total liabilities and net assets 4,004,009 3,921,135

Convertible bond-type bonds with subscription rightsto shares

As of March 31, 2012 As of June 30, 2012


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(2) Consolidated Statements of (Comprehensive) Income(Consolidated Statements of Income)

Operating income and loss from telecommunicationsOperating revenue

Total operating revenue 600,727 594,877Operating expenses

Business expenses 152,965 170,675Operating expenses 10 10Facilities maintenance expenses 72,891 71,821Common expenses 691 606Administrative expenses 17,205 17,406Experiment and research expenses 1,321 1,374Depreciation 93,799 90,271Noncurrent assets retirement cost 2,282 3,762Communication facility fee 87,875 91,888Taxes and dues 11,828 11,313Total operating expenses 440,872 459,131

Net operating income from telecommunications 159,855 135,746Operating income and loss from incidental business

Operating revenue 264,237 266,737Operating expenses 283,996 308,272Net operating loss from incidental business (19,759) (41,534)

Operating income 140,095 94,211Non-operating income

Interest income 199 198Dividends income 561 497Miscellaneous income 1,865 2,504Total non-operating income 2,626 3,200

Non-operating expensesInterest expenses 3,357 2,897Equity in losses of affiliates 4,268 597Miscellaneous expenses 2,648 3,730Total non-operating expenses 10,274 7,224

Ordinary income 132,448 90,186Extraordinary loss

Loss on sales of noncurrent assets 102 -Loss on valuation of investment securities 197 -Loss on the Great East Japan Earthquake 3,674 -Total extraordinary losses 3,975 -

Income before income taxes and minority interests 128,472 90,186Income taxes-current 48,504 25,104Income taxes-deferred 6,234 12,179




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Total income taxes 54,738 37,283Income before minority interests 73,733 52,902Minority interests in income 1,787 1,611Net income 71,945 51,291




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(2) Consolidated Statements of (Comprehensive) Income(Consolidated Statements of Comprehensive Income)

Income before minority interests 73,733 52,902Other comprehensive income

Valuation difference on available-for-sale securities 3,159 (5,830)Foreign currency translation adjustment 2,260 5,899

221 472

Total other comprehensive income 5,641 541Comprehensive income 79,374 53,444(Comprehensive income attributable to)

Comprehensive income attributable to owners of the parent 77,134 50,747Comprehensive income attributable to minority interests 2,239 2,696

Share of other comprehensive income of associatesaccounted for using equity method




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(3) Consolidated Statements of Cash Flows

Net cash provided by (used in) operating activitiesIncome before income taxes and minority interests 128,472 90,186Depreciation and amortization 100,550 98,258Amortization of goodwill 2,910 4,436Loss (gain) on sales of noncurrent assets 95 1Loss on retirement of noncurrent assets 1,513 2,784Increase (decrease) in privision for loss on the Great EastJapan Earthquake (2,018) (144)

Increase (decrease) in allowance for doubtful accounts 568 615Increase (decrease) in provision for retirement benefits 279 (1,137)Interest and dividends income (760) (695)Interest expenses 3,357 2,897Equity in (earnings) losses of affiliates 4,268 597Loss (gain) on sales of investment securities (67) 23Loss (gain) on valuation of investment securities 197 4Increase (decrease) in provision for point service program 1,500 883Decrease (increase) in prepaid pension costs 493 573Decrease (increase) in prepaid expenses (29,398) (25,619)Decrease (increase) in notes and accounts receivable-trade (4,725) 8,029Decrease (increase) in inventories (11,410) 7,280Increase (decrease) in notes and accounts payable-trade 22,778 (14,912)Increase (decrease) in accounts payable-other (13,308) (35,264)Increase (decrease) in accrued expenses 1,108 1,371Increase (decrease) in advances received 2,103 2,670Other, net (3,701) (1,629)Subtotal 204,807 141,210Interest and dividends income received 954 1,388Interest expenses paid (3,434) (3,421)Income taxes paid (57,231) (147,769)Net cash provided by (used in) operating activities 145,097 (8,590)

Net cash provided by (used in) investing activitiesPurchase of property, plant and equipment (57,921) (77,341)Proceeds from sales of property, plant and equipment 177 12Purchase of intangible assets (14,075) (14,986)Purchase of investment securities (995) (114)Proceeds from sales of investment securities 376 1,358Purchase of stocks of subsidiaries and affiliates (73) (820)Purchase of investments in subsidiaries and affiliatesresulting in change in scope of consolidation (1,880) (525)

Purchase of long-term prepaid expenses (4,624) (7,562)Other, net 1,078 (1,109)Net cash provided by (used in) investing activities (77,938) (101,089)




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Net cash provided by (used in) financing activitiesNet increase (decrease) in short-term loans payable (587) 38,184Proceeds from long-term loans payable - 24,000Repayment of long-term loans payable (2,187) (449)Cash dividends paid (31,394) (31,999)Cash dividends paid to minority shareholders (620) (664)Other, net (1,507) (1,769)Net cash provided by (used in) financing activities (36,298) 27,302

Effect of exchange rate change on cash and cash equivalents 603 1,324Net increase (decrease) in cash and cash equivalents 31,463 (81,054)Cash and cash equivalents at beginning of period 159,869 174,191Cash and cash equivalents at end of period 191,333 93,137




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(4) Going Concern Assumption None

(5) Material Changes in Shareholders’ Equity

None

(6) Segment Information, etc. (Segment Information) Ⅰ For the three months ended June 30, 2011 (April 1, 2011 to June 30, 2011)

1. Information on sales and income (loss) by reportable business segment (Amount unit: Millions of yen)

Reportable Segments

PersonalServices

Value Services

Business Services

Global Services

Subtotal

Other (Note 1)

Total

Eliminationand

Corporate(Note 2)

Consoli- dation

(Note 3)

Sales Outside Sales 666,694 22,178 135,495 31,901 856,269 8,694 864,964 - 864,964Intersegment Sales or Transfer

19,017 6,217 17,840 7,194 50,270 27,147 77,417 (77,417) -

Total 685,712 28,396 153,335 39,096 906,540 35,841 942,381 (77,417) 864,964Operating Income 104,711 10,816 20,910 1,132 137,571 2,427 139,998 97 140,095

Notes: 1. The “Other” category incorporates operations not included in reportable business segments, including

equipment construction and maintenance, call center business, research and technological development, and other operations.

2. Adjustment of segment income refers to elimination of intersegment transactions. 3. Operating income for segment is adjusted on operating income on the quarterly consolidated statements of

income.

2. Information concerning impairment loss on noncurrent assets, goodwill and other items by reportable business segment

(Material impairment loss on noncurrent assets) No significant items to be reported.

(Material changes in goodwill) No significant items to be reported.

(Material profit from negative goodwill) None

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Ⅱ For the three months ended June 30, 2012 (April 1, 2012 to June 30, 2012) 1. Information on sales and income (loss) by reportable business segment


Reportable Segments

PersonalServices

Value Services

Business Services

Global Services

Subtotal

Other (Note 1)

Total

Eliminationand

Corporate(Note 2)

Consoli- dation

(Note 3)

Sales Outside Sales 647,138 27,242 138,315 38,027 850,723 10,891 861,615 - 861,615Intersegment Sales or Transfer

18,640 7,478 17,981 8,255 52,357 25,209 77,566 (77,566) -

Total 665,779 34,721 156,297 46,282 903,080 36,101 939,182 (77,566) 861,615Operating Income 65,065 10,086 15,182 1,384 91,719 2,562 94,281 (69) 94,211

Notes: 1. The “Other” category incorporates operations not included in reportable business segments, including

equipment construction and maintenance, call center business, research and technological development, and other operations.

2. Adjustment of segment income refers to elimination of intersegment transactions. 3. Operating income for segment is adjusted on operating income on the quarterly consolidated statements of

income.

2. Changes in reportable business segment From the three months ended June 30, 2012, the Companies commenced a full-scale launch of such services as “au Smart Value” and “au Smart Pass,” based on its growth strategy, the “3M StrategyNote.” In accordance with this launch, the Companies have reclassified its reportable segments into four-“Personal Services,” “Value Services,” “Business Services,” and “Global Services”-in order to manage its operating results by segments that reflect service and customer characteristics. The business included in each segment is as follows. In “Personal Services,” the Companies provide households and individual customers with mobile handset sales and other services in addition to a variety of communications services. In “Value Services,” we provide households and individual customers with various types of content, settlement services, and other services. In “Business Services,” we provide various types of communication services, mobile handset sales, data center services, various types of ICT solution/cloud services, and other services for corporate customers. In “Global Services,” we provide various types of communications services, data center services, various types of ICT solution/cloud services, and other services for companies and individuals overseas. Segment information for the three months ended June 30, 2011 has been revised based on above change.

Note: 3M stands for Multi-network, Multi-device, and Multi-use. The 3M Strategy is the Company's business strategy for

enabling the use of its wide-ranging content and services such as music, videos, ebooks and games. The strategy calls for these to be made available over the Companies’ organically linked mobile phone, FTTH, CATV, WiMAX, Wi-Fi, and other networks (Multi-network); to be available on a host of devices such as smartphones, tablet computers, ebook readers and PCs (Multi-device); and for them to be available for use in the manner the customer requires (Multi-use), conveniently at any place and at any time.

3. Information concerning impairment loss on noncurrent assets, goodwill and other items by reportable business segment

(Material impairment loss on noncurrent assets) No significant items to be reported.

(Material changes in goodwill) No significant items to be reported.

(Material profit from negative goodwill) None

(7) Significant Subsequent Event None

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